Supplementary Report on Economic Benefits

Our ref 40274/04/NG/SMH/CRO/DBu Date July 2015 To Peak District National Park Authority From Nathaniel Lichfield & Partners

Subject Economic Benefits Comparison: Foodstores within Riverside Business Park Regeneration and Bakewell Aldi Proposal

1.0 Introduction

1.1 This Supplementary Report concerns two proposals for foodstores within Bakewell. It provides an overview of the economic benefits of each, before undertaking a comparative analysis to judge which is likely to have the greatest overall economic benefits locally, for Bakewell and in the wider Peak District area.

2.0 Details of the Respective Proposals

2.1 The Peak Sub-Region Retail and Town Centre Study (2009) concludes that the town of Bakewell retains just over half (51%) of its main food shopping spend, whilst the only main foodstore provision in the area (a Co-Op) trades well above its company benchmark level. The trading performance of the Co-Op and the potential for claw-back of expenditure currently directed to destinations outside of the Bakewell area means that the development of a new foodstore in the town is unlikely to have any significant employment displacement impact on the existing town centre foodstore.

2.2 The 2009 Study notes that a lack of a mainstream foodstore and the extent of overtrading of the existing foodstore suggests that increasing the provision of foodstores within Bakewell would:

“deliver particular quantitative and qualitative benefits through enhancing market share performance and widening the choice of foodstore provision for local residents.”

2.3 A full planning application (Ref: NP/DDD/0115/0043) for a 1,254 sq. m gross Aldi foodstore on the site of the former Cintride Factory, Buxton Road, was submitted to the Peak District National Park Authority [PDNPA] on 29 January 2015. Officers reported the proposal to Committee on 15 May 2015 and whilst

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1 Peak Sub-Region Retail and Town Centre Study (2009) paragraph 13.39 Members are minded to grant planning permission, permission is dependent upon the completion of a Section 106 Legal Agreement which is yet to be signed.

2.4 The proposals for Riverside Business Park [RBP] are for extensive redevelopment in phases. The first phase is hotel-led. The second phase (planning application reference Ref: NP/DDD/0415/0340 registered 30 April 2015) includes the proposed development of a 1,579 sq. m foodstore alongside units containing other commercial uses and office space. Planning permission is in granted, and a start is made on, a new bridged access over the adjacent river, from the RBP to the A6 Buxton Road. Completing the new bridged access will be required as a pre-condition to bringing the foodstore into use, with the new access only being achievable financially following realisation of the development value of the proposed foodstore.

3.0 Benefits of the Aldi Proposal

3.1 In its Planning Support Statement, Turley (for Aldi) states that the Aldi scheme will create 26 construction jobs. By applying the assumption that 1 FTE construction job in the East Midlands generates £60,320 GVA, NLP estimates that these construction jobs would create approximately £160,000 of additional GVA per annum during the construction period.

3.2 Once operational, the applicant states that the proposed Aldi foodstore will support 40 FTE jobs (made up of 30 full time employees and 20 part time employees). In the absence of information from the developer regarding the GVA impact of this potential employment, NLP estimates that once operational, the direct operational jobs associated with the Aldi foodstore could generate an additional £1.4m GVA annually.

3.3 Operational employment facilitates indirect or ‘induced’ employment in the form of spending on goods, services and supplies as part of the supply chain of a foodstore. Whilst no details of induced employment estimates have been made publically available, it is assumed that the Aldi scheme would benefit from similar employment multiplier effects as the proposed RBP retail foodstore development (that is, reflecting the characteristics of the proposed development, an induced employment rate of 1.21 for the local area and 1.38 for the wider region). Applying this multiplier allows NLP to estimate that the 40 FTE direct operational jobs which the proposed Aldi development would

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2 Net Internal Area (NIA) – NIA is the usable area within a building measured to the face of the internal finish of perimeter or party walls ignoring skirting boards and taking each floor into account, including bulk store but excluding plant/service areas 3 Turley (2015) Planning Support Statement, 4.19. It is not stated whether this relates to total jobs, person years of employment or full-time equivalent (FTE) jobs. It has been assumed that the 26 jobs relate to 26 person years, or 2.6 FTEs. 4 Peak District National Park Authority: Application Reference NP/DDD/0115/0043 5 This is based upon East Midlands ‘GVA per FTE’ measure from Experian’s Regional Planning Service (RPS) December 2014, applied to the number of FTE jobs stated to result from the Aldi application 6 Based upon English Partnerships (2008) Additionality Guide Third Edition provide, could generate a further 8 FTE jobs in the local area and a further 15 FTE jobs in the wider region.

3.4 A Section 106 Agreement associated with the proposed development is intended to secure the purchase of a bus for a local community group(^7). The legal agreement has yet to be made publically available, so at this stage it is unclear under what arrangement the bus is to be provided. However, it is our understanding that the only contribution is for the capital payment towards the purchase of a bus itself. This is unusual, as in general where there is a reliance on new bus connectivity prior to granting planning permission (and in accordance with Regulation 123 of the CIL Regulations(^8)), it would be usual to ensure that there is provision for operational funding alongside a capital payment.

3.5 The Planning Support Statement also claims that the Aldi proposal will act as enabling development and provide a new serviced access which will unlock the remainder of the former Cintride Factory site for employment development. No further analysis is provided in the Statement of the likely economic benefits to arise from this. DCC Highways has expressly stated that the ability to achieve access, to any proposal for which an application for planning permission is submitted and which relies on the new Cintride access, will be considered on its own merits at the time of any application being submitted. It cannot therefore be said with any certainty that the proposed Aldi development will unlock development on the remainder of the Cintride factory site or what any future economic benefits of such development may be.

4.0 Benefits of the RBP Proposal

4.1 NLP’s Economic Benefits Assessment(^9) (2015) estimates that the foodstore element of the proposed RBP development would generate up to 68 person-years of employment during the construction stage of the development (which includes not just the foodstore but also other commercial and office units). The increase in GVA associated with these direct construction jobs equates to approximately £410,000 per annum during the period of the construction.

4.2 In addition to the employment associated with the construction of the foodstore (and other elements of the RBP application), the employment generated by the standalone foodstore, once operational, is estimated to total around 74 FTE direct jobs(^10), along with additional GVA equating to £2.6m per annum.

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(^7) Peak District National Park (2015) 15 May 2015 Planning Committee Minutes, page 5 (^8) Regulation 123 of the Community Infrastructure Levy Regulations 2010, concerning the further limitations on the use of planning obligations (^9) Nathaniel Lichfield & Partners (2015) Proposed Hotel-led (Full) and Employment/Retail-led (Outline) Development – Economic Benefits Assessment, page 12 (^10) This figure was calculated using a Net Internal Area (NIA) employment density, taken from HCA / OffPAT’s Employment Densities Guide 2nd Edition (2010), converted to a Gross External Area (GEA) density, and applied to the floorspace of the proposed retail foodstore 4.3 As the foodstore is but one element of the wider RBP development, the total operational jobs expected to be generated by the proposed development is 202 FTEs (including the 74 FTEs relating to the proposed foodstore). The additional GVA generated by the application as a whole is also significantly greater, totalling £15.3m per annum.(^{11})

4.4 As discussed above, operational employment facilitates further indirect and ‘induced’ employment in the form of spending on goods, services and supplies as part of the foodstore supply chain.

4.5 Using an induced employment multiplier which reflects the characteristics of the proposed RBP development, a further 42 FTE jobs would be supported in the local area and 76 FTE jobs within the wider region. It should be noted that this supply-chain employment relates to the entire development proposal, and that only a proportion of these jobs would be induced by the operation of the foodstore itself. It is estimated that the proposed foodstore in isolation would sustain around 15 FTE jobs locally, and 28 FTE jobs across the wider region.(^{12})

4.6 Alongside the retail element of the RBP application, other uses include commercial and office uses, whilst the mixed-use application is in itself just one part of an even wider planned redevelopment of the Riverside Business Park as a whole. Of particular note, without the provision of a new bridged access as part of the foodstore RBP application, the future expansion of businesses that currently occupy the remainder of the Business Park would be constrained.

4.7 Although not part of phase 1 or 2 of the proposed development directly, it is considered that there is potential for a further £2.5m of regeneration-related investment that would be facilitated by the improved access brought to the area by the new bridged access.

4.8 This would include the expansion of existing on-site businesses such as Pinelog, which currently employs around 65 (mainly full time) employees at the RBP. Pinelog has confirmed that it would be in a position to stay at the RBP and would expand and employ more workers if the bridge and access road were constructed. Similarly, Thornbridge Brewery currently employs around 35 members of staff at its site and has confirmed that it would aim to double its workforce, which in turn would facilitate a significant increase in production, if the development comes forward.(^{13})

(^{11}) As with the Aldi application GVA estimate, the additional GVA resulting from this development has been calculated by multiplying the FTE employment figures by the average GVA generated per FTE employee (differentiated by industrial category) within the East Midlands region, as calculated by Experian’s Regional Planning Service December 2014

(^{12}) The proportion of induced employment accounted for by the foodstore is calculated using the same induced employment multipliers as is the application as a whole - 1.21 for the local area and 1.38 for the wider region, based upon English Partnerships (2008) Additionality Guide Third Edition

(^{13}) Riverside Business Park Limited (2015) 4.9 The economic benefits of this wider development also align well with a broad range of local planning policy objectives. This is particularly the case through enhancing economic prosperity by creating employment opportunities for local people; increasing the share of higher value private sector employment in the district; re-using previously developed land; and bringing vacant buildings back into use.

5.0 Comparison of Both Applications

5.1 Table 1 compares the direct and indirect benefits of both retail foodstore applications.

Table 1: Comparative Benefits of Both Retail Foodstore Applications

| Aldi foodstore application (Ref: NP/DDD/0115/0043) | Riverside Business Park foodstore application (Ref: NP/DDD/0415/0340) | |---------------------------------------------------|---------------------------------------------------------------------| | • Construction employment of approximately 26 jobs, with associated GVA increase of approximately £160,000 per year of construction | • Up to 68 person-years of construction employment, with associated GVA increase of c.£410,000 per year of construction | | • Operational employment of approximately 40 FTE jobs (comprising 30 FT jobs and 20 PT jobs), with an associated GVA increase of approximately £1.4m annually | • Operational employment of up to 74 FTE jobs as part of the retail foodstore, with associated GVA increase of approximately £2.6m annually | | • Operational employment inducing a further 8 FTE jobs within local shops, services and other businesses, and a further 15 across the wider region | • In addition, between 100-130 operational FTE jobs(^{14}) resulting from units containing other commercial and office space, with associated GVA increase of approximately £12.7m annually | | • As part of a possible Section 106 agreement, the offer to fund the capital provision (but not necessarily the operational costs(^{15})) of a bus for the local Bakewell and Eyam community group | • Support a further 42 induced FTE jobs within local shops, services and other businesses and 76 within the wider region | | • | • A new bridged access over the river from Riverside Business Park onto the A6 | | | • The potential facilitation of up to £2.5m of further regeneration-related investment across the wider Riverside Business Park |

Source: Turley / Peak District National Park Planning Authority / RBP Limited / NLP analysis

5.2 The two proposed developments can be considered against one another in order to determine which provides the greater benefit to the wider area. Whilst the Aldi scheme is likely to generate employment, there is a significantly greater employment benefit from the RBP foodstore and related development.

(^{14}) Depending on the final use-class of the proposed development

(^{15}) Planning Committee 15(^{th}) May 2015 confirms that the Aldi foodstore applicants have agreed to fund the purchase of an additional bus to provide links from Bakewell and the surrounding area to the proposed foodstore through the provision of a legal agreement 5.3 Furthermore, if planning permission for the Aldi on Buxton Road is granted, then the viability of the proposed foodstore at the RBP would be placed in doubt. The access bridge is only viable if the foodstore remains a constituent part of the RBP second phase application. Without the foodstore, it is highly likely that the bridge and connecting access road would no longer be delivered, as no alternative uses at the RBP would be able to generate sufficient investment levels to offset these infrastructure costs. It follows that if the access road were no longer viable to deliver, it is probable that the proposed development would not proceed as currently envisaged.

5.4 A bridge is affordable if a new foodstore comes forward but no other use could generate the level of capital investment required. Without the bridge, there are potentially serious adverse consequences for:

- expansion of existing occupiers’ businesses;
- further employment use at RBP; and
- environmental improvement of the site

5.5 As noted in the NLP economic benefits assessment(^\\text{16}), the access bridge (contained within the second phase of the proposed second phase RBP development) is critical for the expansion of Pinelog operations; the wider redevelopment of RBP (including environmental enhancements); and associated additional employment within the area. Without the foodstore and therefore the access bridge, the expansion of Pinelog (along with other businesses within RBP) would not occur.

5.6 The granting of planning permission for an Aldi foodstore on the former Cintride site would potentially prevent significant levels of future investment at RBP from coming forward, jeopardising the expansion and future sustainability of important local businesses currently located at the site and therefore the additional employment that would be associated with such expansion.

5.7 In contrast, granting planning permission for a foodstore at the RBP site would not only encourage existing companies to remain at the site, but it would also allow them to consolidate and expand their businesses which would in turn attract other businesses to the area. This process of ‘agglomeration economics’ could potentially increase the likelihood that the former Cintride site and adjacent employment areas to come forward for economic uses. It would also provide a regenerative benefit by enhancing the various gateway sites in the vicinity of RBP, alongside more generalised environmental improvements across a wider area.

(^{16}) Ibid 6.0 Conclusion

6.1 To conclude, it is considered that on the basis of the evidence contained within this report, not only do the proposed RBP developments provide a greater potential number of overall employment benefits associated with the foodstore itself (c.70 operational FTE jobs compared to Aldi’s c.40 FTE jobs), there is also a very significant opportunity cost (or ‘benefit foregone’) which may be lost if permission is granted to the standalone Aldi foodstore on Buxton Road.

6.2 This is due to the much wider employment benefits associated with the RBP application, namely:

- The larger number of construction and operational jobs (both direct, indirect and induced) forecast for the RBP proposal relative to the Aldi application, the generation of which is dependent upon the RBP foodstore coming forward; and

- A foodstore not coming forward as part of the second phase of redevelopment at RBP would remove the viability of a new bridged access road into the site and hence almost certainty prevent it from coming forward. This in turn would drastically compromise the viability and/or attractiveness of the Business Park as a commercial site. This would further constrain business expansion/redevelopment, potentially leading to a spiral of decline in the local area as companies are forced to move away to locations that better meet the needs of modern businesses.

6.3 It is for these reasons that it is considered that the proposed foodstore at the RBP site provides a considerably larger and more comprehensive package of employment benefits that can be delivered by a standalone Aldi foodstore.